For Immediate Release
Chicago, IL – February 8, 2013 – Zacks Director of Research, Sheraz Mian, says we have started to see expectations for 2013 come down a bit, but there is likely much more room to go.
Earnings Season Winding Down at Par
Combining the reports that have come out with the ones still to come, the composite fourth quarter earnings growth rate is +1.7%, which compares to a flat reading in the third quarter, but lower than what we have been seeing the quarters prior to that. But the expectation is for earnings growth to resume from the second quarter of 2013 and increase materially in the back half of the year. We have started expectations for 2013 come down a bit, but there is likely much more room to go.
- The bulk of the fourth quarter reporting season is now behind us, with results from 333 S&P 500 companies already out. These 333 companies account for 76.6% of the index’s total market cap and contribute 78.1% of the index’s total Q4 earnings.
- Total earnings for these 333 companies are up +2.7%, a beat ratio of 67.3%, and median surprise of +3.2%. Total revenues are up +0.5%, beat ratio of 62.5%, and median surprise of +0.9%.
- Finance is the key driver of growth, with total Finance sector earnings up +18.8% from the same period last year. Excluding Finance, total earnings would be down -0.3%.
- Tech has been a laggard, with earnings growth almost non-existent and many of the industry leaders including Apple (AAPL), Google (GOOG) and Microsoft (MSFT) coming short of revenue expectations. Total Tech sector earnings are up +2.4%.
- Industrial Products is particularly weak, both in terms of growth as well as negative surprises. The weak comparisons are not limited to Caterpillar (CAT), the issue is quite widespread, with the fourth quarter on track to be the weakest earnings season for the group in the last 8 quarters.
- Combining the results that have come out with those still to come, the composite earnings growth rate for the fourth quarter is +1.7%, which compares to flat growth in the third quarter. Excluding Finance, the composite fourth quarter earnings growth rate drops to 0% (down -0.04%), compared to the decline of -4.1% for the ex-Finance group in the third quarter.
Want stock picks from Zacks Equity Research that are based on earnings estimates? Subscribe to the free "Profit from the Pros" newsletter: http://at.zacks.com/?id=7160
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.
Then, when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.
The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time. Register for your free subscription at http://at.zacks.com/?id=5187
Follow us on Twitter: https://twitter.com/ZacksResearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact: Sheraz Mian
More From Zacks.com